They do charge the fee even on internal routing mechanisms. I bet they are paying the SEC (or at least settling it) based on whoever is doing their audits. That's a great question which I'd like to hear an answer to.

Quote from SgtSlottter:

does anyone know if they have to pay SEC fees on this? I assume they are charging them regardless, but curious if there is any reason this trade would trigger them.

does anyone know if they have to pay SEC fees on this? I assume they are charging them regardless, but curious if there is any reason this trade would trigger them.

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no, they don't. one of the big reasons internalizing is so attractive. if they're charging them, they're skimming.

have a question for the OP, when you get charged these wash fees, are you directing orders to lit routes (arca, naz, etc.?), or are you using their smart router?

if you're getting them even when you're routing to lit, then i'd rec you to run not walk from that firm. there'd be no way to prevent the massive conflict of interest they have in using that as a profit center.

Wrong! If a firm internalizes orderflow it is a good thing for the traders if you know how to take advantage of it. Think about....you are always in front of the line ahead of the book and the rest of the trading universe. One word on how to work this to your advantage: pinging.

JT

Quote from propseeker:

no, they don't. one of the big reasons internalizing is so attractive. if they're charging them, they're skimming.

have a question for the OP, when you get charged these wash fees, are you directing orders to lit routes (arca, naz, etc.?), or are you using their smart router?

if you're getting them even when you're routing to lit, then i'd rec you to run not walk from that firm. there'd be no way to prevent the massive conflict of interest they have in using that as a profit center.

Wrong! If a firm internalizes orderflow it is a good thing for the traders if you know how to take advantage of it. Think about....you are always in front of the line ahead of the book and the rest of the trading universe. One word on how to work this to your advantage: pinging.

JT

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if your firm is charging you for hitting nqbx because they decide it's a wash and rerouting internal, then it's not a good thing. hence my question. otherwise, yea agree if you're trading against uninformed flow.